Last week the Fed warned that the dull American economy will get even worse than the economists predicted. Fed expressed concern as there is no sign of improvement of housing market and its stabilization and predicted that it can even deteriorate in future.

According to The Federal Reserve estimate, in 2009 the unemployment rate could touch 8.8%. The Central Bank report also indicates the new home building and future project applications have touched record low in January. Some economists still hopeful for a better future.

The Federal Reserve forecasts that in 2009 the economy will shrink between 0.5 and 1.3%. Some days ago it predicted the contraction of 0.2% or expansion by 1.1%. In 1991 the US economy had been shrinked by 0.2% and remained for a year. According to FED premonition the economy is going to be on its weakest position since 1982 (1.9% contractions).

The dark forecast is showing the deep toll of the toughest financial crises. The country is facing the economic crisis for the consecutive year. The production of factories and mines has dipped 1.8% on January. The economists were expecting a fall in production but this has crossed their expectations too. The auto plants production have been down by 23% for the consecutive 3rd month. The construction sector has also been dropped by 16.8% from December 2008.

According to some economists the construction market is worst since 1930 and the situation is going to worsen day by day. Last week another boost came from Obama of $75 billion (to save 9 million citizens from loosing their home), this can also work for the housing sector.

Credit score is the numerical expression that helps us to determine any person’s creditworthiness. It can be increased or decreased according to your deed. Credit scores can vary from 300 to 900. The greater the score the better will be your advantage.

Your every credit related behavior can have a role in determining your credit score either positively or negatively.

Some behavior that affect the score positively:

Lets have a look at some behavior to better your score.

Always pay the bills before the due date, don’t skip any bill payment.

Only use the 25% or less credit of the credit limit. If someone’s credit limit is $100,000 he should not cross balance of $25,000.

One must try to have a steady employment history to have a better credit score as the people with steady income seen as better payer of the bills.

Some credit behavior that can decrease your credit score:

The person who have skipped or paid late of their bill.

Some one who has used more than 80% of the available credit.

If anyone becomes bankrupt or who have to face the foreclosure, the score is bound to down miserably.

If anyone has to be unemployed for sometime, it must have a bad effect on his credit score.

Many requests to have new lines of credit can also hamper the credit score.

The Prime Factors Influencing Credit Score:

The Payment History, the outstanding debt, the length of credit history, number of credit inquiries for the credit are the prime factors that can define your credit score.

In my next post I will try to focus on these influential factors and the calculation too to have a more clear idea about the credit score.

Here is a chart, you can have a look to have a clear idea about the average credit score that are present in different states.

As a result of this package already record breaking cash deficit will reach 10-12 % of GDP in the year 2009-10. Due to the gigantic volume of the package and some long lasting programs, the cash deficit can be double of the previous peace time record.

The Federal debt can touch 100% of the gross domestic product. Since the World War II this is unprecedented and now US is in the same league of Italy (debt touches 104% of the gross domestic product).

The Democrats are trying to gather public support before the next week Senate vote. Barack Obama also expressed that its not good to do nothing in the time of economic turmoil. Now every one is eager to find out whether the burden of the stimulus package make the US into a debt burden country or be able to get out of the economical downturn?

$125 billion is also to be spend to reinforce the public education. Normally the education sector is left for the state and regional government but this time federal government is also keen in the sector. $20 billion is going to be spend for the renovation of educational institutions. To avoid the lay offs in education sector $79 billion is to be given to the states. $13 billion has been proposed as extra fund for the high poverty areas. For special education programs $13 billion has been proposed.

To repair and construct the public housing, $5 billion has been proposed to spend. To help the unemployed persons during the financial meltdown $27 billion is to be spend as unemployment benefit. The unemployment benefit is being increased from $300 to $325 per week with the help of extra $9 billion. This plan is going to allow the unemployed to enroll in Medicaid (Health Program serving the poor). For the short time this will allow millions of unemployed workers to get the benefits of Medicaid.

The Democrats from the House and Senate are trying to have major changes in the legislation to help the unemployed due to the foreign competitions. The Trade Adjustment Assistance program that was formed in 1962, will be expanded to cover many more types of workers.The house bill will give 52.5% of fund through the normal annual Medicaid disbursements and the rest will be given under new bonus program to help the states with high unemployment rates.

On 28th January the House has passed the tax and spending bill of $819 Billion to fight with the recession. This will broaden the federal government’s reach in the American economy by reforming the strategies on Health, Energy, Education, Social programs etc. This bill is almost equal to complete yearly expenditure of federal, under Congress’s approval. Senate is also preparing to pass a similar package which is also of almost $900 billion.

These will result in federal government’s debt in its peak since the World War II. The House bill represents Barack Obama’s view that America is in crisis and has to work beyond "stale political arguments".

The money will be spend on some projects like- clean water projects, student loan program and housing related assistance etc. The bill will help the unemployed to get medical benefits and can expand the use of renewable energy. $335 million will be spent on STDs (sexually transmitted diseases). $50 million will be given for the Arts. National Oceanic and Atmospheric Administration will get $70 million from The Senate bill to buy a supercomputer. $75 million will be spent for smoking awareness programs.

This approach to boost economy is contradictory to the Bush Administration’s approach. The Bush Administration tried to save the economy by putting more money in the middle and upper class people’s pocket through tax cuts. Obama is spending $275 billion giving tax relief to the families belonging to the lower income group. To encourage the job creation, business incentive has also been planned. The bill has expands the coverage of the unemployment insurance for the part-time workers.

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Financial updates is a collection of all types of financial information. Here you'll get information on mortgage,debt,insurance,credit etc. and also you will get their resolutions. My blog is totally focused on financial matters and I have provided useful financial information on different financial topics which may help you to solve your financial problems.